They’re here. For years, real estate agents and builders eagerly anticipated the entrance of millennials into the housing market.
A generation now larger than the baby boomers, millennials were battered by the financial crisis as they started their careers and delayed some of the milestones that accompany homeownership, such as marrying and starting a family. But in 2018, they represented the largest cohort of homebuyers at 37%, according to the National Association of Realtors.
“Millennial homebuyers are often looking for a lot at first and then they’re scaling back as they start searching for a home because of high prices and the limited selection of homes in most markets,” says Danielle Hale, chief economist for Realtor.com.
Despite the obstacle of low inventory of homes on the market, millennials are not likely to compromise on the condition of the home, which Hale says is in part because of their lack of experience as homeowners.
Brian Kee, 36, and his wife, Eliana, 33, purchased a three-bedroom, townhouse-style condo for $515,000 in Arlington, Va., upgrading from the nearby condo they owned for six years now that they have a child.
Although the Kees looked at single-family houses in the area, they ultimately settled on a townhouse about 200 feet from where they already lived.
“For us, the neighborhood and commute were more important than the size of the place,” Brian Kee says. “We also like that it was move-in ready and we didn’t have to do any work.”
“Millennials want almost instant HGTV-approved living,” says Michelle Sagatov, a real estate agent with Washington Fine Properties in Arlington. “As long as it’s on-trend enough, they’re happy to just bring their furniture and their toothbrush and move in.”
Understanding the priorities and preferences of millennial buyers is important to developers and to home sellers. “I tell sellers that there’s a ‘three-strike’ rule with a lot of buyers: If they have to change three things right away, that’s a deal-breaker,” Sagatov says. “Buyers don’t want to have to do any renovation, especially not right away.”
Seeking a community
Millennials range in age from mid-20s to late-30s, which means that some are early in their careers while others have more buying power and need space for a family.
“As a whole, millennials are very interested in a sense of community and place a priority on the neighborhood,” says Kerron Stokes, a real estate agent with RE/MAX Leaders in Denver.
Lauren Demeter, 31, and her husband, Landon Rordam, 32, who bought a single-family house in Arlington for $1 million, said they quickly realized their initial idea of purchasing a fixer-upper would take too much time and money.
“We found a 2,600-square-foot Tudor-style home with a detached garage that had already been converted into an office on the main level with a guest room upstairs,” Demeter says. “We prioritized a single-family home with at least three bedrooms and we wanted to be within walking distance of Metro since I work downtown.”
Many younger buyers have flexible jobs, Sagatov says, and telecommute part of the week. That means access to transit is less important to them than access to a fitness center, parks, coffee shops, and restaurants.
Pets over parking
Pets are more important to urban millennials than parking, says Trent Heminger, a real estate agent and executive vice president with Compass real estate brokerage in Washington.
Millennial buyers looking at condos ask whether the building is pet-friendly and whether there are any weight or other restrictions, Sagatov says. If they’re looking at a townhouse or single-family house, they want a yard for their dog, even if it’s small.
“For younger millennials who haven’t started a family yet, or even those who do have kids, the family pets are also a priority,” she says. “That’s one reason many young buyers want an outdoor space.”
Heminger says some millennial buyers are willing to take less square feet inside — “or even give up a bedroom — in order to get a little bit of outdoor space.”
In more suburban locations, a slightly larger yard where homeowners can have friends around is desirable.
“Outdoor living is a big part of the social fabric for millennials,” Stokes says. “A space for a fire pit or a covered patio where you can entertain a few friends are ideal.”
Tech-savvy millennials like the convenience of technology that they can control remotely, Heminger says, such as the ability to buzz someone in to deliver a package or someone who will walk their dog.
“Millennials grew up in the digital age, which gave them a thirst for instant information at their fingertips and virtual communication,” Stokes says. “Appliances such as smart thermostats, smart doorbells, and more that can be controlled from an app are all the rage. Connectivity is king when putting a house on the market these days.”
A simple step that sellers can take is to swap out standard outlets for ones that include USBs for charging, Stokes suggests. A USB outlet costs $7 to $9 a switch, he says.
“Constantly being on a smartphone drains a lot of power,” Stokes says. “When your home offers a charging hub or outlet for people, especially in unconventional rooms like the kitchen, they are more likely to stop and take a second look.”